Bandhan Bank on Friday said it has received "no objection" from the Reserve Bank of India (RBI) for the proposed merger of Gruh Finance with it.
"We would like to inform that the Reserve Bank has by its letter dated March 14, 2019, conveyed its no objection for the voluntary amalgamation of Gruh Finance Ltd into and with Bandhan Bank, subject to compliance with the terms and conditions therein," the lender said in a regulatory filing.
In January, the city-headquartered Bandhan Bank said its board of directors had approved merger of India's leading housing finance company, with a focus on the affordable housing segment, into the bank.
The merger would help the bank to achieve product and geographic diversification while improving penetration in its core customer segment. On the other hand, the housing finance company would get access to a wider distribution network, a larger customer base and low-cost deposit base of the bank.
Post-merger, the shareholding of Bandhan Financial Holdings Ltd in the bank would reduce from 82.3 percent to 61 percent.
The share exchange ratio accepted by the boards of two entities was 568 equity shares of face value of Rs10 each of Bandhan Bank to be issued for every 1,000 equity shares of face value of Rs.2 each of Gruh.
Shares of Bandhan Bank on Friday closed at Rs 511.05 a piece, down by 0.45 percent on the BSE.